Amigo Holdings PLC Financial results for the year Financial results for the three months to 31 March 2020 to 30 June 2020
Disclaimer This presentation has been prepared by Amigo Holdings PLC (“the Company”) and includes the results of Amigo Loans Group Ltd (“ALGL”) solely for informational purposes. A reconciliation of the results between the Company and ALGL is shown in the Appendix. For the purposes of this disclaimer, the presentation shall mean and include the slides that follow, the oral presentation of the slides by the Company or any person on their behalf, any question-and-answer session that follows the oral presentation, hard copies of this document and any materials distributed in connection with the presentation. By attending the meeting at which the presentation is made, dialing into the teleconference during which the presentation is made or reading the presentation, you will be deemed to have agreed to all of the restrictions that apply with regard to the presentation and acknowledged that you understand the legal and regulatory sanctions attached to the misuse, disclosure or improper circulation of the presentation. The Company has included non-IFRS financial measures in this presentation. These measurements may not be comparable to those of other companies. Reference to these non-IFRS financial measures should be considered in addition to IFRS financial measures but should not be considered a substitute for results that are presented in accordance with IFRS. The information contained in this presentation has not been subject to any independent audit or review. Certain of the information contained in this document is based on estimates or expectations of the Company, and there can be no assurance that these estimates or expectations are or will prove to be accurate. The Company has not verified the accuracy of such information, data or predictions contained in this report. In addition, past performance of the Company is not indicative of future performance. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of this presentation or the opinions contained herein. The future performance of the Company will depend on numerous factors which are subject to uncertainty. Certain statements contained in this document are forward-looking statements, including, without limitation, any statements preceded by, followed by or including the words “targets,” “believes,” “expects,” “aims,” “intends,” “may,” “anticipates,” “would,” “could” or similar expressions or the negative thereof, notwithstanding that such statements are not specifically identified. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions which are difficult to predict and outside of the control of the management of the Company. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company has based these assumptions on information currently available, if any one or more of these assumptions turn out to be incorrect, actual market results may differ from those predicted. While the Company does not know what impact any such differences may have on its business, if there are such differences, the Company’s future results of operations and financial condition, and the market price of the notes, could be materially adversely affected. You should not place undue reliance on these forward-looking statements. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements referenced above. Forward-looking statements speak only as of the date on which such statements are made. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any of the information in this presentation to reflect events or circumstances after the date on which this presentation was made, or to reflect the occurrence of unanticipated events. The presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue, or the solicita tion of an offer to purchase, subscribe to or acquire the Company or the Company’s securities, or an inducement to enter into investment activity in any jurisdiction in which such offer, solicitation, inducement or sale would be unlawful prior to registration, exemption from registration or qualification under the securities laws of such jurisdiction. No part of this presentation, nor the fact of its distribution, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. This presentation is not for publication, release or distribution in any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction nor should it be taken or transmitted into such jurisdiction.
Nayan V. Kisnadwala Chief Financial Officer
Agenda Financial Review Regulatory Update Summary and Outlook Q&A’s Results Regulatory Summary & Financial Appendix Overview Review Update Outlook 4
Business headlines Return to profit despite Covid-19 challenges Q1 collections at 87% of pre Covid expectations; adequate liquidity, funding and capital Advanced preparations underway to resume lending by the end of this calendar year On track to meet complaints VReq deadline; FCA investigation continuing Key appointees to the Board demonstrate intent to build a sustainable business for the long term Results Regulatory Summary & Financial Appendix Overview Review Update Outlook 5
Financial Headlines Net loan book of £553.1m, a 24.1% decrease year on year Net Loan Book 1 Impairment:revenue Impairment:revenue ratio up 7.4ppts to 37.9% (Q1FY20: 30.5%); ex Covid-19 ratio at 15% Complaints provision broadly flat at £116.4m with £6.8m charge in Q1 Complaints provision Cost:income ex- Operating cost:income ratio, excluding complaints, increased to 23.0% (Q1FY20: 20.6%) complaints Statutory Statutory profit after tax £3.0m; (Q1FY20: £18.1m) Profit after Tax Cash £145.2m of cash and cash equivalents; (Q1FY20: £27.5m) Gearing Net borrowings/adjusted tangible equity of 1.8x, improved from 2.4x at year end, flat YoY 1 Net loan book represents total outstanding loans less provision for impairment excluding deferred broker costs. Results Regulatory Summary & Financial Appendix Overview Review Update Outlook 6
P&L: return to profit Commentary 3 Months 3 Months Ended Ended % Change • Declining revenue is driven by the combination of a 24.1% £'millions 30-Jun-20 30-Jun-19 reduction in net loan book and the recognition of a £12.9m Net Loan Book 553.1 728.4 (24.1%) modification loss relating to Covid-19 related payment holidays (see Customer numbers ('000) (5.2%) 199.0 210.0 overleaf) Total Revenue (31.7)% 48.8 71.5 • Excluding changes to economic assumptions and modification loss Total interest payable (7.4) (10.4) (28.8)% accounting, impairment was 15% of revenue in the quarter. The Impairments (18.5) (21.8) (15.1)% combination of a £3.1m modification loss, due to payment holidays, Operating expenses (23.8)% (11.2) (14.7) and an £8.1m impact from the revised economic scenario Complaints 240.0% (6.8) (2.0) weightings, resulted in an increased reported ratio of 37.9% Exceptional Items NM (3.5) - Profit before tax (93.8)% 1.4 22.6 • Operating expense:revenue of 23.0% reflects continued efficiency Tax on profit (135.6)% 1.6 (4.5) of the business model Profit after tax 3.0 18.1 (83.4)% • Complaints P&L cost of £6.8m; balance sheet provision of £116.4m Senior Secured Note buybacks - 0.5 at 30 June 2020, broadly flat with the year end provision RCF Fees 0.7 2.2 • Strategic Review 3.5 - Cost of strategic review and FSP is £3.5m in the period Tax Provision (2.5) - • Net borrowings / adjusted tangible equity at 1.8x, improved from Less Tax (0.8) (0.4) 2.4x at the full year and flat year on year Adjusted profit after tax (80.9)% 3.9 20.4 EPS (Pence) 0.6 3.8 (84.2%) Adjusted EPS (Pence) (81.4%) 0.8 4.3 Net Borrowings/ adj. tangible equity 0.0% 1.8 1.8 Results Regulatory Summary & Financial Appendix Overview Review Update Outlook 7
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